12 Commonly Overlooked Tax Deductions You Could Claim During Tax Time

As Tax Time 2024 unfolds, millions of Australians are currently in the process of lodging their tax returns. With the average refund for 2023 nearing $3,000, it's essential to    claim all eligible deductions you're entitled to. Seeking professional assistance from H&R Block ensures all eligible deductions are claimed while avoiding impermissible ones.

While some deductions are obvious, others may be more unusual. Work-related expenses, such as temporary work living costs, may be deductible. Mobile and internet costs used for work, along with unique professional tools, also qualify. Deductions extend to accessories, donations, and some pet expenses, but personal use items like sex toys are only deductible for business use. Income protection insurance premiums and tax-related costs like professional fees are also deductible.

Uncover more about these unique tax deductions below.
 

1. Rental property expenses

While many rental property owners are aware of claiming deductions for the mortgage interest, numerous other deductible expenses often go unnoticed. Ensure you claim deductions for any of the following costs incurred this year:

• gardening and lawn mowing
• bank fees
• pest control
• security patrol fees
• bookkeeping/secretarial fees
• maintenance and repairs
• end of lease cleaning costs
• letting agent fees, including marketing.

Additionally, don't forget to maximise your capital works deductions, essentially the depreciation on the building itself. Engaging a quantity surveyor to assess your property can yield higher claims than expected, with various items like swimming pools and fences potentially qualifying.
 

2. An apartment in another city

If you own an investment property, you can claim deductions against the rental income. However, did you know that in some cases, you can also claim deductions for a place you live in yourself? According to new guidelines issued by the ATO, if your employer requires you to work away from home temporarily (meaning you haven't actually relocated), and you opt to rent or buy an apartment in the other work location instead of relying on hotels or motels, you can claim deductions for the work-related costs related to the apartment. This includes either rent or interest on the mortgage, depending on whether you rent or buy.
 

3. Mobile phone expenses

If you use your personal mobile phone for work, whether to make or receive calls, you can claim the cost of these calls as a deduction. However, you can only claim business-related calls. To determine the proportion of business and personal use accurately, maintain a diary for at least four weeks. For instance, if you have a $100 monthly mobile phone plan and your diary indicates that 25% of your calls are work-related, you can claim a deduction for $25 per month or $300 per year.

Likewise, if you use your home internet service to handle work-related matters, such as responding to work emails, you can also claim a portion of those costs. Remember to keep a detailed diary to accurately calculate the proportion attributable to work-related use.
 

4. Performance tools

If you're a professional performer (actor, musician, dancer, magician, circus performer, etc.), there are all sorts of unique deductions you might consider claiming. Mime lessons? Absolutely. The cost of ceremonial swords? Certainly, if you're a professional sword swallower. Acting classes, dance classes, musical instruments, magic tricks— if you make a living from the stage or screen, a plethora of unusual and fascinating claims become available to you.
 

5. Handbags

Careful consideration is necessary in this area. The handbag must be suitable for work purposes and actively used for such, like carrying work papers or a laptop computer. While claiming a new Gucci bag might be a stretch, a more modest bag—exclusively used for work—should be eligible. Similarly, a work briefcase, satchel, or backpack should also qualify for deduction.
 

6. Social functions

As a general rule, the ATO won't allow you to claim tax deductions for a night out. However, there are exceptions when attending such functions is integral to your work. For instance, if a journalist attends an event they will later report on through their media outlet, a deduction can be claimed in that instance.
 

7. Charitable donations

You can claim a tax deduction for any donation over $2, provided you have supporting documentation, such as a receipt, and it's paid to a Deductible Gift Recipient (DGR). Fortunately, most well-known charities qualify as DGRs.

If you made one or more small cash donations, each of $2 or more, to bucket collections to a DGR – for example, to collections conducted by a DGR for natural disaster victims – you can claim a total tax deduction of up to $10 for those donations for the income year without a receipt.
 

8. Memberships and subscriptions

If you're a member of a professional or trade association as part of your work, you can claim a deduction for the amount you pay in subscriptions. This also covers union fees if you're a member of a trade union, as well as subscriptions to trade or professional magazines or – if you're an investor – subscriptions to financial publications and other research services. There are even a few people who are entitled to claim gym memberships, typically those who require a level of fitness well above the norm. Examples might include professional sportspeople and those defence force personnel who perform duties designed to keep them in tip-top shape, such as members of the special forces.
 

9. Dogs

Can you seriously claim a tax deduction for your pet pooch? Unfortunately, no. However, there are circumstances where deducting expenses related to a dog could be a real possibility. If your business has a guard dog to maintain premises security, the dog is indeed deductible. It's considered a capital asset of the business, allowing you to claim an immediate deduction for the entire cost using the very generous instant asset write-off for small businesses. Naturally, the dog must be suitable for its purpose; a poodle is unlikely to suffice. The same principle applies to dogs that can be seen on a farm, such as a sheepdog, or dogs employed by truck drivers transporting livestock.
 

10. Sex toys

While it's commonly understood that you can claim deductions for the tools you use in your trade, the tools themselves can vary greatly depending on your profession. For those in the adult industry, deductions could extend to sex toys, lubricants, and various other "accessories". However, it's important to note that you can only claim the business use portion; personal use doesn't qualify for a tax deduction.
 

11. Income protection insurance

If you pay for insurance premiums to safeguard against loss of income, those amounts are tax-deductible. However, it's essential to note that this doesn't apply to life insurance, critical care insurance, or trauma insurance. Furthermore, policies paid for using your superannuation contributions are also excluded from tax deductions.
 

12. Tax-related expenses

If you paid for a tax professional to complete last year's tax return, you're eligible to claim a deduction for the cost in this year's return. Additionally, you can claim deductions for any travel expenses incurred in traveling to and from your tax agent. Moreover, any costs associated with tax advice sought throughout the year are also deductible.
 

H&R Block can help!

Maximising deductions is key during tax time. Whether it's work-related expenses or more unique deductions like performance tools or handbags, knowing eligible claims can greatly impact your refund. Our Tax Experts can guide you through these deductions to ensure you receive the maximum refund possible.

• Download our tax time checklist
• Calculate your tax refund here
• Find your nearest H&R Block office and book an appointment or lodge your tax return online with H&R Block Tax Experts.